Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 16
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46Form 706 (Rev. 11-01)
● The power to surrender or cancel the policy;
Instructions for Schedule D—Insurance on
● The power to assign the policy or to revoke an
the Decedent’s Life
assignment;
If you are required to file Form 706 and there was any
● The power to pledge the policy for a loan;
insurance on the decedent’s life, whether or not
● The power to obtain from the insurer a loan
included in the gross estate, you must complete
against the surrender value of the policy;
Schedule D and file it with the return.
● A reversionary interest if the value of the
Insurance you must include on Schedule D. Under
reversionary interest was more than 5% of the
section 2042 you must include in the gross estate:
value of the policy immediately before the
● Insurance on the decedent’s life receivable by or
decedent died. (An interest in an insurance policy
for the benefit of the estate; and
is considered a reversionary interest if, for
● Insurance on the decedent’s life receivable by
example, the proceeds become payable to the
beneficiaries other than the estate, as described
insured’s estate or payable as the insured directs if
below.
the beneficiary dies before the insured.)
The term ‘‘insurance’’ refers to life insurance of every
Life insurance not includible in the gross estate
description, including death benefits paid by fraternal
under section 2042 may be includible under some
beneficiary societies operating under the lodge system,
other section of the Code. For example, a life
and death benefits paid under no-fault automobile
insurance policy could be transferred by the decedent
insurance policies if the no-fault insurer was
in such a way that it would be includible in the gross
unconditionally bound to pay the benefit in the event
estate under section 2036, 2037, or 2038. (See the
of the insured’s death.
instructions to Schedule G for a description of these
sections.)
Insurance in favor of the estate. Include on
Schedule D the full amount of the proceeds of
Completing the Schedule
insurance on the life of the decedent receivable by the
You must list every policy of insurance on the life of
executor or otherwise payable to or for the benefit of
the decedent, whether or not it is included in the gross
the estate. Insurance in favor of the estate includes
estate.
insurance used to pay the estate tax, and any other
taxes, debts, or charges that are enforceable against
Under ‘‘Description’’ list:
the estate. The manner in which the policy is drawn is
● Name of the insurance company and
immaterial as long as there is an obligation, legally
● Number of the policy.
binding on the beneficiary, to use the proceeds to pay
For every policy of life insurance listed on the
taxes, debts, or charges. You must include the full
schedule, you must request a statement on Form 712,
amount even though the premiums or other
Life Insurance Statement, from the company that
consideration may have been paid by a person other
issued the policy. Attach the Form 712 to the back of
than the decedent.
Schedule D.
Insurance receivable by beneficiaries other than the
If the policy proceeds are paid in one sum, enter the
estate. Include on Schedule D the proceeds of all
net proceeds received (from Form 712, line 24) in the
insurance on the life of the decedent not receivable by
value (and alternate value) columns of Schedule D. If
or for the benefit of the decedent’s estate if the
the policy proceeds are not paid in one sum, enter the
decedent possessed at death any of the incidents of
value of the proceeds as of the date of the decedent’s
ownership, exercisable either alone or in conjunction
death (from Form 712, line 25).
with any person.
If part or all of the policy proceeds are not included
Incidents of ownership in a policy include:
in the gross estate, you must explain why they were
● The right of the insured or estate to its economic
not included.
benefits;
● The power to change the beneficiary;
Schedule D—Page 16
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